Roman Abramovich has asked the architect of London's revamped Royal Opera House to draw up plans for a £250m palace of culture on a St Petersburg island to be overseen his art-loving girlfriend, Dasha Zhukova.

The Russian billionaire owner of Chelsea football club has invited Dixon Jones architects to draft designs for the eight-hectare New Holland island, Peter the Great's military port, which is bordered by two canals and a river and is a 20-minute walk from the Hermitage museum.

Zhukova, a 29-year old former model, will be the creative director of the project and she is planning to establish an affiliate of her Garage gallery in Moscow, which has become established as the hub of Russia's contemporary art scene.

David Chipperfield, the Stirling prize-winning architect of the rebuilt Neues Museum in Berlin, has also been invited to compete alongside architects from France, the Netherlands, the US and Russia. Artists including Ilya and Emilia Kabakov, a leading US-based husband and wife team, have been asked to feed in design ideas.

The development is being bankrolled by Millhouse, one of Abramovich's companies, but his spokesman, John Mann, denied reports that it would include a home to show off his burgeoning fine art collection which includes paintings by Lucian Freud and Francis Bacon.

"It will be a mixed-use development with commercial and cultural spaces and it will be open to the public," said Mann.

The project will involve the renovation of historic buildings on the 18th-century naval dockyard site, which now sits abandoned and largely covered in rubble. There will be office space as well as cultural attractions and construction will take seven years.

The selected architects are working on their concept designs and there will be a shortlist announcement in March followed by the final decision later in the spring.